Hong Kong’s retail sector revives: top landlords see positive signs from shop tenants, while office market lags
- Swire Properties says retail sales at some shopping centres are back at pre-pandemic levels, while Hysan Development reports rising tenant revenue
- However, the office market is lagging as high vacancy rates continue
A recovery in the retail property market in Hong Kong is on the right track, but the same cannot be said for the office market amid continued high vacancy rates and economic uncertainty, according to leading landlords Swire Properties and Hysan Development.
Both companies pointed to encouraging signs in the retail market as they reported their first-half financial results on Thursday. Retail sales at some of Swire’s shopping malls, which include Pacific Place in Admiralty and Cityplaza at Taikoo Shing in Quarry Bay, improved to pre-pandemic levels, said CEO Tim Blackburn.
Meanwhile, Hysan, the owner of Hysan Place and Lee Gardens, said retail sales at its properties grew faster than in the overall Hong Kong market, leading to a 67 per cent year on year increase in turnover rent, a percentage of business turnover that tenants pay on top of their base rent. The occupancy rate for the company’s retail portfolio stood at 98 per cent, it said.
“In terms of the overall market we’ve been really encouraged by the recovery of retail malls in Hong Kong over the first six months of this year,” Blackburn said at a media briefing on Thursday afternoon. “We’ve seen strong recovery as tourism and travel has resumed.”
Swire Properties reported a 49 per cent decline in net profit to HK$2.22 billion (US$284 million) for the six months ended June 30, citing valuation losses in its investment properties in Hong Kong and the US.
